(-) Supreme Court Reins In Activist Lawsuits, Major Win for U.S. Businesses

The Supreme Court ruled 6-3 that private plaintiffs cannot pursue aiding-and-abetting claims against American companies for alleged violations of international law, shutting down a major category of litigation targeting U.S. corporations.

The decision in Cisco Systems, Inc. v. Doe eliminates claims under the Alien Tort Statute and the Torture Victim Protection Act. The case originated from allegations that Cisco sold surveillance equipment to China used to persecute Falun Gong practitioners.

What the Court Decided

Justice Amy Coney Barrett, writing for the majority, stated that Congress-not courts-holds authority to create legal remedies for international violations. “Today, we close the door that Sosa cracked and hold that courts may not create new causes of action for violations of international norms,” Barrett wrote.

The majority emphasized separation of powers concerns, warning that judicial creation of liability risks “adverse foreign policy consequences.” Barrett clarified that the Alien Tort Statute functions as jurisdictional only and does not authorize courts to invent new claims.

Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh joined Barrett’s opinion.

The Dissenting Views

Justice Ketanji Brown Jackson concurred in part and dissented in part, joined by Justice Elena Kagan. Jackson agreed to narrow the Alien Tort Statute but argued the Torture Victim Protection Act could encompass aiding-and-abetting liability in limited cases.

Justice Sonia Sotomayor filed a broader dissent, contending the majority “jettisons two decades of settled precedent.” She warned the ruling “forecloses future reliance on Sosa and shuts the courthouse doors to almost any claimed violation of international law under the ATS.”

Impact on Corporate Litigation

The ruling eliminates a significant litigation avenue targeting U.S. corporations over their international operations. Lower courts had previously allowed similar claims to proceed, creating legal exposure for American companies abroad.

The Ninth Circuit had permitted the Falun Gong practitioners’ claims against Cisco to advance before the Supreme Court reversed course.

 

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